Order Fulfillment in Review: June 2016

As the fireworks fade and summer vacation plans loom large, the hectic schedule and holidays can prevent you from consuming all the supply chain news you’d typically follow.

That’s where Capacity comes in, offering up our usual monthly review of all things important, intriguing, and even downright odd that have made headlines in supply chain circles.

Fulfillment in Review: June 2016

Here are the main stories that caught our eye during the month of June:

The newly expanded Panama Canal finally opened towards the end of June, bringing with it larger vessels, shorter transit times, and an increased focus on the infrastructure of destination ports. This holds significance for Capacity’s key locations in California and, especially, New Jersey, as the race to complete infrastructure improvements crystallizes into exact dates and project deadlines.

“Rail traffic remains relatively weak” is the underwhelming analysis from the Association of American Railroads (AAR) in its summary of June’s performance, although the organization admits to being unsure how the second half of the year will pan out. With total carload traffic down a little over two percent in June and 12.3 percent for the first half of the year overall, the best the AAR could muster in its outlook for the near-term was “cautious optimism.”

The country’s roads had more cause to focus on the positive side of cargo movements, halting a two-month decline in truck tonnage with gains of 2.7 percent in May over April. The American Trucking Association’s (ATA) numbers also show a 5.7 percent year-on-year increase compared to May 2015. While the increase is positive news, the organization points out that the economic outlook remains mixed as we hit the halfway point of the year. Another interesting tidbit to note, more than two-thirds of US freight, including manufactured and retail goods, is moved via US roadways, making it an important leading indicator for the economy as a whole.

Last-mile logistics hit the headlines again last month, as Walmart entered a crowded field of big box retailers engaging ride-sharing/cab-hailing apps like Uber and Lyft to make deliveries. Primarily experimenting with grocery deliveries, Walmart has launched trials with both services in Denver (Uber) and Phoenix (Lyft). The overall cost-effectiveness of such services is yet to be proven as a business model. Even so, trials such as these indicate the importance of catering to customers who want hyper-local levels of service, even from the biggest brands in the business.

Furniture seller Wayfair won the Internet Retailer of the Year award for 2016. The parent company operates five online brands in the home furnishing space and grew its web sales by 71 percent last year. Not bad for its first twelve months as a publicly traded company, competing in a highly competitive space.

Canadians spent much of late June making plans for potential mail disruption, as the country’s postal service threatened industrial action. Canada Post workers have since issued a 72-hour “lockout notice,” which could go into effect on Friday 8th July and hamper deliveries around the country. Say what you will about the USPS, but they haven’t engaged in a strike in almost 40 years. All together now: “Neither snow nor rain nor heat nor gloom of night…“